Fans of open access not optimistic on 700MHz auction results

What should we expect from the FCC's 700MHz spectrum auction asit winds down? …

Meeting in a panel for journalists and Senate staffers in Washington DC, open network advocates expressed their apprehension in the days leading up to the completion of the FCC's broadcast spectrum auction. That auction, which covers 62MHz of broadcast frequency in the 700MHz band, comes as television broadcasters are vacating their analog channels for the federally-mandated transition to digital, which must occur by 2009. Two of the channel "blocks," labeled the C and D blocks, will be licensed on a national basis—Block C with open access requirements—making them very interesting to companies looking to build or expand high-speed wireless broadband services.

"We feel like the 700MHz auction was probably the most significant event at the FCC in the decade, and certainly the most significant spectrum auction in history," said Ben Scott, Policy Director for Free Press, "and yet most citizens are clearly unaware that it happened at all. In fact many citizens are unaware that the public owns the airwaves."

Attempting to summarize the argument for open-access regulations in the auction, Michael Calabrese, Vice President for the New America Foundation, reiterated the markers of an open network, as originally stated by FCC Commissioner Michael Copps: pricing that does not include connection charges and which is cheaper for non-subsidized devices; fast, cheap, and independent equipment and software certification; no lock-in; the ability to use third-party applications and access any legal Internet content; and no prioritization or degradation of traffic, as Comcast sometimes does with P2P traffic.

Gigi Sohn, President of Public Knowledge, took a slightly more optimistic view of the upcoming auction results. She noted indications that a larger array of diverse bidders have likely been involved, thanks to the anonymous bidding that prevents collusion and back-room dealing. However, Sohn was also critical of events that had taken place during the auction of the smaller D block of frequencies, and drew attention to allegations of misconduct and conflict-of-interest. Congress and the FCC must investigate, she said, and pointed out that since the reserve price for that auction was not met, the opportunity exists to do so before it is put up for sale again.

Speaking for Skype, Christopher Libertelli commented on the petition his company had submitted to the FCC, requesting that organization apply the Carterfone regulations (which permitted any nonharmful device to be connected to the AT&T phone network, paving the way for modems and DSL) to the wireless network. To illustrate how this would spur innovation, he held up two handsets: one that allows Skype calls over WiFi, and another that can make Skype calls over WiFi or a cellular network, and seamlessly switch between the two as needed.

The former was easy to create, due to the independent WiFi certification and lack of carrier lock-in. The latter, Libertelli cautioned, was currently only possible in Europe and Asia, where open device policies are widespread, but he was optimistic about the value represented by the open-access regulations on the auctioned frequencies. In the past, he said, competition had been "intermodal," or between networks. But in wireless, he hoped, there could be a "multimodal" competition across network ecosystems.

Blair Levin, Managing Director and principal telecom analyst for Stifel Nicolaus, elaborated on the importance of the Carterfone regulations during the following question and answer session. It showed that competition could take place at the edge on the provider side, he said, instead of in the "last mile" that connects to consumers. Still, he and the other panelists were pessimistic about the possibility of new networking technologies opening up to challenge existing broadband providers. Sohn pointed out that there's a wide range of spectrum owned by the government that may not be in use, in addition to the ongoing "white spaces" initiative, which could be useful in urban areas. She was scathing in regards to the recent New York Times op-ed on white spaces by Representive Jerrold Nadler (D-NY), referring to it as "95 percent false" and "full of lies and more lies."

Asked about network neutrality efforts in the light of 700MHz auction results, Calabrese again asserted that the reauction of the D block gives the FCC an opportunity to encourage new entrants to the networking space. "One silver lining, perhaps, is that part of that debate can be whether, in addition to public safety, …we can require whoever wins [the D-block] to be a wholesale provider," he said. "If it's wholesale access then we will have an additional competitor. I think it would be worth eliminating the reserve price, as well as putting any other 'carrots' out there, so we can have both of those good things for the public interest."

Finally, panelists had a few thoughts on HR 5353, the House bill introduced by Rep. Edward J. Markey, which would require the FCC to conduct new hearings on broadband policy, specifically addressing the concerns of network neutrality advocates. It builds momentum, they said. But Levin in particular seemed set for a long haul, one that will depend on the election results come November. "In Washington," he said, "2008 is all about 2009."